Speaking at the tenth annual workforce conference in Sydney on Monday, Australian Industry Group (AIG) boss Heather Ridout said the Fair Work Act, introduced by the federal Labor government just over two years ago, was stifling productivity.
She told the audience an AIG survey of 250 member companies found most wanted to see the return of individual contracts and flexible workplace deals.
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"Sixty-nine per cent of respondents stated that they would like to see some form of statutory individual agreement option introduced into the Fair Work Act," she said.
Large companies were most in favour of individual contracts.
"Over 80 per cent of employers with over 500 employees wanted the act to be amended to permit statutory individual agreements," Ms Ridout said.
A big bone of contention was the higher penalty rates that came into play when the Fair Work Act was introduced, Ms Ridout said, giving the example of a glass manufacturer who turned to imports rather than pay workers a sudden jump in penalties.
"The afternoon shift loading applicable to his glass manufacturing workers increased from 15 per cent to 50 per cent,"she said.
"And as a direct consequence he has decided to leave his machinery idle after the day shift and to import the glass products he would otherwise have made," she said.
Higher penalty rates were also hurting those who hired staff in the retail sector, as well as those needing staff at fast food chains and restaurants, Ms Ridout said.
About 80 per cent of companies surveyed said they were "very concerned" or "somewhat concerned" about wage expectations of their employees over the next 12 months.
Ms Ridout also criticised the Fair Work Act for restricting the engagement of contractors and on-hire labour.
"Prior to the Fair Work Act coming into operation, enterprise agreements and awards were not permitted to include provisions which imposed restrictions on the engagement of contractors (individuals or companies) or on-hire," she said.
Consequently, it was difficult for companies to match the supply of labor with demand for products and services, Mr Ridout maintained.
Workplace Relations Minister Chris Evans has announced a review of the act from January 1 next year.
